Common Errors Found While Processing ITR 4, 5 and 6 for AY 2009-10

1. Schedule Profit and Loss is filled with a claim for depreciation but depreciation details are either not added back in Schedule BP or details of depreciation in plant and machinery and other assets are not filled by the assessee in Schedule DPM, DOA and Schedule DEP, leading to disallowance of depreciation.

2. Assessees declaring deemed income under section 44AD, 44AF, etc., are filling up Schedule P & L account but not entering all relevant details in Schedule BP such as Items A4, A33, depreciation, Schedule DPM/DEP etc in the return, leading to addition to deemed income.

3. Schedule OI is filled with details of disallowances or amounts added back to income due to the provisions like 40A, 40(a), 43(1), 36 but they are not entered in Schedule BP in arriving at the income from Business and Profession leading to additions to income mentioned in Schedule BP during processing.

4. Schedule CFL is not being filled by assessee who is claiming adjustment of Brought Forward Loss Adjustments. The assessee has to fill the schedule CFL and give the breakup of the losses claimed for set off which alone will be considered for Schedule BFLA. Direct entries in Schedule BFLA will not be entertained, thus leading to demand due to disallowance of claim for adjustment of brought forward loss.

5. Schedule VI A details are not filled correctly. The assessee is filling only the Total deductions under Chapter VI A without giving break up of deductions claimed. Also while claiming deductions in Chapter VI A the respective schedules like 80IA, 80IB, 80IC, 80G, etc. are not filled, leading to disallowances of deductions claimed under Chapter VIA.

6. In ITR 5 in many returns the assessee has not selected Status (such as Cooperative Society, Firm, etc) in the General Information Portion of ITR 5 leading to taxation at higher rate or disallowance on specific deductions like 80P, etc.

7. In ITR 6 many assessees are opting for ‘No’ in section in General Information relating to ‘If a Domestic Company’. When ‘N’ is selected the tax rate applicable to Foreign Companies will be charged, leading to higher taxation.

8. The payment details in Schedule IT and Schedule FBT are misconstrued by the assessee. The assessees have claimed Income Tax payments in Schedule FBT and FBT payments in Schedule IT leading mismatch and disallowance on credit for tax payments.

9. Schedule MAT is not being entered by many assessees even though they are falling within the ambit of the provisions of MAT.

10. In Schedule CG, there are additions to Total income on account income from STCG due to incomplete filling of the Schedule CG, incorrect apportionment of Total STCG as determined in Item 6 between Items 7 and 8 and incorrect or incomplete filling up of the correct code and corresponding value of STCG under section 111A in Schedule SI- Income chargeable to Income tax at special rates. Mistakes in LTCG are due to incomplete filling of the Schedule- CG and incorrect or incomplete filling up of the correct code and corresponding values of LTCG in Schedule SI- Income chargeable to Income tax at special rates.